FTC's 'Click to Cancel' Rule Targets Subscription Traps

The U.S. Federal Trade Commission adopted a final rule, called the “click to cancel” rule, requiring businesses to make it as easy to cancel subscriptions and memberships as it is to sign up.

FTC Chair Lina Khan stated the rule addresses rising consumer frustration over difficult cancellations.
Companies must match the simplicity of sign-ups with an equally easy cancellation process.
Some provisions of the rule will go into effect within 60 days, but most will take effect after 180 days.

The U.S. Federal Trade Commission (FTC) has introduced a "click to cancel" rule aimed at curbing subscription traps that make it difficult for consumers to cancel services, according to a Reuters report.

The "click to cancel" rule requires retailers, gyms and other businesses to get consumers' consent for subscriptions, auto-renewals and free trials that convert to paid memberships.
The rule mandates that companies provide an easy cancellation method—comparable to how users sign up in the first place—whether it's through online platforms, phone calls, or other methods.

Some provisions of the rule will go into effect within 60 days, but most will take effect after 180 days, according to Ars Technica.

The FTC added "a provision allowing requests for exemptions," but those will likely be reserved for businesses already complying with the rule. Each request for exemptions will be weighed individually.

What the Rule Provides

FTC guidance for the rule recommends that businesses keep "three guardrails in mind" to ensure cancellation methods comply with the law:

Customers cannot be required to talk to a live agent or chatbot to cancel if that wasn't required for sign-up.
Any phone cancellation methods cannot include charges and must be offered during normal business hours.
Canceling services in person must always be optional.

Businesses offering subscriptions, automatic renewals, and free trial offers must always make sure they clearly disclose all terms of the deal prior to accepting payment, including how much and how often customers will be charged, when free trials or promotions end, any deadlines to avoid charges, and how to cancel.

Businesses must also get consumers' informed consent before issuing charges and maintain records of consent for a minimum of three years.

‘An Overdue Measure’

FTC Chair Lina Khan noted that the rule responds to a significant increase in consumer complaints expressing frustration over subscriptions that are deceptively easy to initiate but extremely difficult to end.

“It’s extraordinarily easy to sign up for a subscription but absurdly difficult to cancel,” Khan said, emphasizing that the rule is an overdue measure to protect consumers from these "dark patterns."

Khan further added that the FTC rule will end all kinds of subscription-related tricks and traps, saving Americans time and money. “Nobody should be stuck paying for a service they no longer want.”